On October 23 of this year, Klaytn, a public blockchain focused on the metaverse and gaming infrastructure, announced a governance proposal to cut block rewards. According to the official statement, the new Q3 updates submitted to the Klaytn Governance Council (GC) aim to optimize the issuance rate of KLAY tokens with a governance proposal that reduces the block reward by ⅓.
Block rewards will drop from 9.6 KLAY to 6.4 KLAY, 50% will be distributed to GC, 40% to Klaytn Growth Fund (KGF) and 10% to Klaytn Improvement Reserve. The proposed reduction was calculated based on the current circulation of tokens and demand for them. The team expects to reduce KLAY’s inflation, making it more attractive to new investors and making it more competitive, while ensuring the sustainability of Klaytn’s tokenomics.
On October 23 this year, KLAY governance token rose 106% from $0.1387 to a peak of $0.2865 following the news of a new token reduction proposal. At the time of writing, the token is trading at $0.1865. While the proposal has yet to be approved, the price increase is a good sign of acceptance and optimism from the community.